STATISTICAL
PORTRAYAL OF THE CRIMINAL INVESTIGATION DIVISIONíS ENFORCEMENT ACTIVITIES FOR
FISCAL YEARS 2000 THROUGH 2007

Issued on July 9, 2008

Highlights

Highlights of
Report Number: †2008-10-133 to the Chief,
Criminal Investigation.

IMPACT ON TAXPAYERS

During this annual review, TIGTA analyzed information from the Criminal
Investigation Management Information System reports to determine the trends and
changes in the major areas of criminal enforcement.† Several key performance measures that had declined
in prior years improved during Fiscal Year (FY) 2007.† Continued progress in enforcement of the tax
laws and prosecution of criminal tax violations is important to enhancing voluntary
compliance by taxpayers and fostering confidence in the integrity of the tax system.

WHY TIGTA DID THE AUDIT

This audit was initiated as part of the
TIGTA FY 2008 Annual Audit Plan.†
While the overall trend information presented covers FYs 2000 through
2007, the report concentrates on 1) analyzing program performance for the last
5 years and 2) providing an indepth perspective on program activities for the 2
most current fiscal years.† TIGTA
reviewed several key performance measures, including staffing, investigations,
fraud referrals, prosecution referrals, convictions, sentencing, and fraudulent
returns. †

WHAT
TIGTA FOUND

TIGTA previously reported that from FY
2005 to FY 2006 several key performance measures had deteriorated, including
the numbers of investigations initiated, investigations in open inventory,
cases recommended for prosecution, subjects convicted of a crime, and subjects
sentenced for a crime.† In addition, TIGTA
reported that increasing special agent staffing remains a challenge as the Criminal
Investigation Division continues to lose experienced special agents to
attrition faster than it can replace them.†
According to its most recent estimates, the Criminal Investigation
Divisionís planned hiring will not offset attrition from either FY 2007 or FY
2008.

This year, however, several key
performance measures that had declined in recent years improved.† For example, the number of subject investigations
initiated increased 7.8 percent; the number of subject investigations
recommended for prosecution increased 4.3 percent; and the numbers of subjects
convicted and sentenced increased 6.7 percent and 5.1 percent, respectively.† In addition, the Department of Justice
acceptance rate for the Criminal Investigation Divisionís prosecution cases
increased to 94.6 percent from 92.2 percent in FY 2006.† Similarly, the United States Attorneyís
Officesí acceptance rate for the Criminal Investigation Divisionís prosecution
cases increased to 90.2 percent from 88.3 percent in FY 2006.

One area that continues to remain a
challenge is pipeline inventory (investigations referred to the Department of
Justice for prosecution), which increased to its highest level in 8 years.† For the first time since TIGTA began
reporting on the Criminal Investigation Divisionís enforcement activities,
there were more investigations awaiting prosecution by the Department of
Justice than open subject criminal investigations within the Criminal
Investigation Division (3,981) as of September 30, 2007.† As more time and investigative resources are
expended on the pipeline inventory, fewer resources might be available to
initiate and complete investigations.

In an effort to enhance voluntary
compliance, the Criminal Investigation Division changed its philosophy to allow
more publicity of its tax investigations.†
The overall publicity rate of 79.7 percent for prosecutions in FY 2007
was an all-time high.

WHAT TIGTA RECOMMENDED

Due to the nature of this review, TIGTA made
no recommendations.† However, key Criminal
Investigation Division management officials reviewed the report prior to
issuance and agreed with the facts and conclusions presented.